MANILA, July 22 – Food and oil inflation and volatility in financial markets will cut growth in Asia to 7.6% this year from 9% in 2007, says the Asian Development Bank (ADB).,
The Manila-based organisation said inflation in the region was expected to rise to 6.3%, more than double the average rate of the past 10 years.
Inflation has been rising in countries across the region, where half of family expenditure is on food and fuel.
To tackle inflation fiscal authorities have been tightening credit recently.
"Rising inflation is a serious threat to the region\’s sustained, strong growth as high import costs of food and fuel threaten to trigger a price/wage spiral, unleashing more inflation," ADB economist Jong-Wha Lee said in the bank\’s semi-annual report.
Economic growth in China is expected to slow to 9.9% in 2008 and 9.7% in 2009, from a growth rate of 11.9% in 2007.
The slowdown in China is seen as being due to a gradual appreciation of the yuan, monetary tightening policies and weakening external demand, the bank said.
Growth in the 10-member Association of Southeast Asian Nations (Asean) is forecast to ease by 1 percentage point to 5.5% in 2008, the bank said.